President Trump tweeted Friday that White House budget director Mick Mulvaney will be acting chief of staff, replacing John Kelly.

Until last week, Mulvaney also served as acting director of the Consumer Financial Protection Bureau.

The announcement comes after a week of speculation about who would replace the retired Marine four-star general.

Office of Management and Budget Director Mick Mulvaney (R) passes Homeland Security Secretary John Kelly (L) as he makes his way to the podium in the Brady Briefing Room of the White House on May 2, 2017 in Washington, DC.

Mandel Ngan | AFP | Getty Images

President Donald Trump named Mick Mulvaney, director of the Office of Management and Budget, as his acting chief of staff.

The White House budget director responded to the president's tweet, calling it a "tremendous honor."

The short list of potential replacements for Kelly reportedly included Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, former New Jersey Gov. Chris Christie, and Vice President Mike Pence's chief of staff, Nick Ayers.

Earlier Friday, Christie issued a statement asking the president to remove him from consideration for the position. One source told NBC News that Trump was desperate to kill the narrative that no one wanted to be his chief of staff.

A White House official told NBC Mulvaney's term as acting chief of staff is "indefinite" and did not rule out that he could eventually be bumped up to chief of staff. Two sources told NBC that Mulvaney was the one who requested the "acting" title. One person told NBC that Mulvaney wanted to step into the role with a safe exit in place, if needed.

White House communications director Bill Shine told NBC that Mulvaney was picked because Trump likes and gets along with him. He said Mulvaney is "politically savvy" and "fiscally responsible."

Mulvaney is a Republican former congressman from South Carolina and was a member of the hard-line conservative Freedom Caucus. He also recently served as the acting director for the Consumer Financial Protection Bureau, until last week when the Senate approved Trump's nominee Kathy Kraninger to lead the watchdog agency.

A person familiar with the matter told CNBC that Russ Vought, deputy director of the Office of Management & Budget, will take on more of a leadership role at the agency.

Kelly's tenure as chief of staff has been plagued by tensions and confrontations with Trump and other members of the administration. He had succeeded Reince Priebus, the former head of the Republican Party who spent less than a year in the job.